| African Union Alarmed Over North-South Tensions
Sudan to be on Ethiopia’s Grid
The 296 Km long and 230KV (kilovolts) Ethio-Sudan Transmission Line project, which costs USD 41 million, is set to be commissioned during the first quarter of 2012. The project which started in 2008 and has three sections of transmission lines in Ethiopia: Bahir Dar-Gondar (137.2Km), Gondar-Shehedie (122Km) and Shehedie-Metema (37Km), is expected to connect with a transmission line in Sudan Gedaref city. The project, financed by the World Bank, has an Iranian firm, SUNIR international, as substation contractor, while the transmission line contractor is ENEGROINVEST of Bosnia Herzegovina. The project consultant until December 2010 was HIFABOY of Finland and FITCHER of Germany. The Transmission and Engineering office of Ethiopian Electric Power Corporation (EEPCO) has been undertaking the project consultancy and supervision work since 2011. The Ethio-Sudan Transmission Line Project is part of Ethiopia’s plan of interconnecting East Africa through renewable and clean electric power and it’s also one of the projects for the development of East African Power Pool (EAPP).Source: Capital, January 08, 2012.
Mugher Dangles between Ministries to Secure Export Permit
Managers at the state-owned Mugher Cement Enterprise have been in a to-and-fro state, lately, in their bid to secure an export permit to sell their products to buyers in Kenya and South Sudan, sources disclosed for Fortune. The Enterprise has had a dominant place in the cement market until recently, operating in a near monopoly for many years. The number of factories with a production capacity of three million tonnes, which were trying to meet a projected demand of 11 million tonnes last year, has grown to 15, with a combined capacity of 7.8 million tonnes, according to a recent study by the MoI. They requested officials at the Ministry of Trade (MoT), last week, to give permission to export cement, but their request was referred to the Ministry of Industry (MoI) for a decision. Expecting a higher demand, the Enterprise has undertaken a 1.4 billion-Br expansion project, to add 1.7 million tonnes of cement to its annual production. Nonetheless, in a complete turnaround of the trend in the construction industry, demand for cement has suddenly dropped, while the capacity of factories and supply has increased. Source: Fortune, January 08, 2012.
South Sudan Eyeing Petroleum Pipeline Construction via Ethiopia
South Sudanese Ambassador to Ethiopia Arop Deng Kuol said that his country considering the possibility of construction petroleum pipeline to Djibouti via Ethiopia. Ambassador Kuol told the Ethiopian Herald that Ethiopia is the right country for the pipeline to pass through as the oil fields are only 200-300 kms away from it. “It would be the shortest pipeline, if we do it through Ethiopia. Technicians are now working to identify landmarks which are suitable for the pipeline to be constructed on the Ethiopian soil,” he said. He indicated that South Sudan is also considering another option which is the establishment of an oil refinery in our common border with Ethiopia for the benefit of the whole region. Fruitful discussions are going on concerning this, he said. The ambassadress also indicated that South Sudan is keen to strengthen economic relations with Ethiopia in the years ahead. “It is not a small market that should be undermined. There must be a strong cooperation that would be beneficial for both countries, he said. Source: The Ethiopian Herald, January 07, 2012.
Ethiopia Dec. Inflation Eases to 35.9 pct Y/Y.
Ethiopia’s annual inflation eased for a fourth straight month in December to 35.9 percent from 39.2 percent a month earlier, helped by a slowdown in food price increases, official data showed on Tuesday. However, consumer prices in the Horn of Africa country rose 1.7 percent month-on-month in December after falling 0.3 percent during November, according to a statement from the Central Statistics Agency. Ethiopia’s food inflation rate slowed to 46.5 percent in December from 50.3 percent a month earlier, while the non-food inflation rate eased to 21.8 percent from 24.2 percent. Ethiopian consumer prices surged last year with the rate of inflation peaking at 40.6 percent in August. It has declined steadily since then but remains highly elevated. Inflation has become a major problem across the east and Horn of Africa, as poor rains have damaged harvests while global oil prices have surged. The International Monetary Fund, which expects Ethiopia’s economy to grow 7.5 percent this year, says inflation is the country’s main economic challenge. Source: The Daily Monitor, January 11, 2012.
Agency Begins Organic Banana Export
The Ethiopian Horticulture Agency said it has begun exporting organic banana produced in Arba Minch and its environs, Southern Nations, Nationalities and Peoples State for the first time. Agency organic banana project coordinator, Geremew Kenna told ENA over the weekend that 200 tons banana would be supplied every week as per the agreement reached with a Saudi company.Geremew said the agency is working in collaboration with the state marketing and Cooperatives Union ad the Agriculture Department of the Gamo Gofa Zone with a view to upgrading the quality of the produce. According to information obtained from the Zonal Agriculture Department, nearly 2.5 million quintals banana is estimated to be harvested annually from an area of 7,912 hectares in banana growing wore as of Gamo Gofa Zone. Source: The Etjiopian Herald, January 11, 2012.
Sudan to Establish Free zone Area with Ethiopia
Sudanese Minister of Finance and National Economy reportedly disclosed the intention of his country to establish a free zone area between Sudan and Ethiopia at Galabat area with the aim to reactivate the commercial relations between the ordering areas. The report from Khartoum cited Minister Ali Mahmoud Abdul-Rassoul as having affirmed keenness of Sudan to reactivate its economic and commercial relations with Ethiopia, besides revamping all the commercial and banking protocols signed between the two countries as part of the activity of the joint cooperation committee, which is scheduled to be held during the first quarter of 2012.Ambassador Siral-Khatim has affirmed Sudan keenness to boost its relations with Ethiopia for the interest of the two nations, pointing to the strategic locations of the two counties as a gateway to the other continents as well as to the Middle East. The two counties said at the meeting that they were committed to implement past trade agreement and increase their cooperation. Relation between Ethiopia and Sudan has also seen a boost in infrastructure, development and investment sectors. Source: The Daily Monitor, January 10, 2012.
Government Warns of 'Huge' Economic Impact If Khartoum Blocks Oil Export
South Sudan's oil minister said Tuesday that north Sudan was siphoning off his country's oil, threatening to instigate legal proceedings against any country or company involved in buying the allegedly stolen crude. Since landlocked South Sudan seceded in July 2011 - taking with it 75% of the Sudan's known oil wealth - the two countries have failed to negotiate a fee for the South to export its oil using north Sudan's infrastructure. South Sudan is considering building a pipeline to Kenya to bypass having to use north Sudan's infrastructure but this is years away from being achieved. In the six months since South Sudan became independent in July 2011 the two countries have failed to reach agreement on oil, assets, debt, citizenship and how to demarcate the poorly defined tense new international border. The two countries are due to resume bilateral talks this month. The Sudanese president Omer Hassan al-Bashir on 4 January that South Sudan was not negotiating in good faith and accused Juba of not paying fees to use it facilities. Most of the oil fields lie near the border. South has claimed Khartoum is arming South Sudanese rebel groups in order to destabilize the new country and retake control of Unity State's oil fields. Source: Sudan Tribune, January 10, 2012.
Exporters loose out as Port Congestion Intensifies
A fresh pile-up of cargo at the port of Mombasa is causing anxiety among exporters as delays in clearance put orders worth billions of shillings at stake. Traders said a flood of uncollected containers has jammed the facility, with slow clearance by Kenya Revenue Authority (KRA) and Kenya Ports Authority (KPA) adding to their losses. The port delays highlight the soaring of imports (mainly oil and food items) which widened the country's current account to 10 per cent of GPD last year - higher than Greece's according to World Bank Group. To ordinary citizens, the adverse impact of this gap between imports and exports hit the local market in October last year when shilling deteriorated to Sh107 against the dollar. "Kenya's export performance is poor due to a number of factors, including inefficiencies at the port of Mombasa, inadequate and expensive supply of energy," the World Bank said in its 2011 end-year assessment. KPA last month threatened to levy punitive charges on cargo owners who fail to collect 10,000 containers within the stipulated 21 days period. Cargo owners who have piled up cleared containers will be surcharged $30 per day on every 20-foot container if it remains in the port days after the official deadline and $45 per day after 25 days. This means that every second of delay quickly translates to a loss big enough to be felt across the Great Lakes region. Experts have pointed out that Mombasa port can only be efficient once there is a good network of roads and efficient railway transport that match the influx of imports and exports. Source: Business Daily, January 05, 2012.
International Shipping news
Ship union to seek extra pay for members
A union representing 23,000 seafarers will seek extra payments for its members if Iran's threat to disrupt oil shipments through the Strait of Hormuz endangers their safety, as US officials ramped up rhetoric against the Islamic state.
So far, the impact on neighbouring ports has been muted.
Iran has the ability to block the Strait of Hormuz 'for a period of time', and the US would take action to reopen it, Joint Chiefs of Staff chairman General Martin Dempsey said in an interview aired yesterday on the CBS Face the Nation programme. 'We've invested in capabilities to ensure that if that happens, we can defeat that.'
The union Nautilus International wants to have the waterway deemed a Warlike Operations Area in case of 'clear evidence' of risks to safety, Andrew Linington, director of communications, said last Thursday.
Such a designation would enable members of the London-based union to receive bonus payments or refuse to enter the zone, he said.
'It would have to get to the stage where bullets were flying to have an agreement,' Mr. Linington said.
A similar agreement for mariners was set out last year for Libya during the uprising that deposed Muammar Gaddafi as leader of the northern African country, according to Mr. Linington. That would provide a template for a Strait of Hormuz accord, he added.
Blocking the Strait of Hormuz, a strategic shipping lane linking the Gulf of Oman with the Persian Gulf, would constitute a 'red line' for the US, as would Iranian efforts to build a nuclear weapon, Defense Secretary Leon Panetta said on Sunday. Source: Bloomberg, January 11, 2012.
Daily Piracy Update-Recent Activity
M/V LIQUID VELVET, a previously pirated vessel may be used as a mother ship. It was last reported making way 120nm off the coast of Somalia in vicinity of 10 22N 058 33E. This vessel was pirated on 31 Oct 11, and neither the vessel or crew have been released from pirate control. Details can be found under Alert 004.
Masters are advised to exercise extreme caution when navigating through this area, and maintain maximum CPA with any ship acting suspiciously. Please see photo of M/V LIQUID VELVET at left.
Masters are still advised to be vigilant while transiting the HRA as there are other PAGs still active in the Bab al Mandeb (BAM), Gulf of Aden (GOA), and Arabian Sea (AS). Specific areas of concern are indicated on the current Situation. This will ensure the information is quickly provided to other ships in the area for their awareness and vigilance. If Merchant Masters are safely able to take photographs and/or video during an attack and provide these photos and/or videos, as well as the details of the situation, to the NATO Shipping Centre and UKMTO it would be greatly appreciated. This information will be used to assist the Counter Piracy forces’ ability in combating piracy activities.
Source: Shipping NATO, January 11, 2012.
Pirates hijack Iranian ship in Gulf of Aden
Pirates in the Gulf of Aden have hijacked an Iranian ship carrying 30,000 of tones petrochemical products to a North African country, Iran's semi-official Mehr news agency reported on Tuesday.
Somali sea gangs have seized vessels and crews across the Gulf of Aden and the Indian Ocean, extracting millions of dollars in ransoms.
Mehr did not say where the information on the latest reported attack came from.
Separately on Tuesday, the Pentagon said American forces had rescued six Iranian mariners who said their ship was taking in water off the coast off Iraq. Iran announced plans on Friday to hold new naval exercises in the Strait of Hormuz next month, the latest in a series of forceful gestures in the world's most important oil shipping lane.
Source: Reuters, January 11, 2012.
Full ahead on armed guards contract
A second round of discussions on the BIMCO standard armed guards contract took place in London at the offices of Ince & Co on 5 January. A preliminary draft contract has been prepared and is currently the subject of a detailed review by the Sub-committee who will meet again on 16 January to complete the process.
BIMCO plans to release a consultation draft to a number of international private maritime security companies as part of the development process. Comments from these companies as well as Documentary Committee members will be taken into account by the Sub-committee when they produce their final draft for approval and publication. The Sub-committee is working flat-out to develop and fine-tune the draft contract so that it can be released for use by the industry as soon as possible. However, there are many complex legal and liability issues to be resolved, and it is not a task that the Sub-committee is undertaking lightly. Parallel work on a set of standard Rules for the Use of Force (RUF) is ongoing and the Sub-committee will be looking to tie the draft RUF to the work on GUARDCON at their 16 January meeting. Source: BIMCO, January 12, 2012.